Iranian President Ahmadinejad was in Venezuela at the start of a five-day tour intended to shore up support as expanded Western economic sanctions kick in over the Islamic Republic's nuclear programme.

"They say that we are building bombs. Ignorant people would probably ask themselves what is really happening. Fortunately, the people of Latin America are awake and know the truth behind all those words," he said.

"They know they are intended to mock and laugh in our face because they are afraid about our development. Those countries don't want our economic development and success against poverty. They don't want the industrialisation or the advancement of our agriculture for our own good, in all they don't want us to develop."

Iran and Venezuela signed new accords Monday covering tourism, science and technology, energy, and the automotive industry forging closer ties between the two OPEC nations while continuing to condemn US and Western sanctions.

The Obama administration expelled the Venezuelan diplomat from the US, following claims she had discussed possible cyber-attacks on US soil while she was stationed at her country's embassy in Mexico.

"This is another sample of the ridiculous arrogance of the empire [referring to the United States]. We will evaluate with our foreign ministry what kind of response we will uphold against the outrage towards our people, towards our nation, and towards our revolution," said President Chavez.

He claimed she had been demonised by "extremist groups and by the government of President Obama".